GOLD remains primed for a profit-taking pullback , not yet?
Gold is off the record highs, but buyers retain control amid a broadly weaker US Dollar.
Renewed US-China trade tensions, bets for two more Fed rate cuts offset upbeat IMF global growth outlook.
Gold challenges the upper boundary of a rising channel on the daily chart, with RSI still heavily overbought.
Gold keeps on making higher highs on the daily time frame, sitting close to fresh record highs below $4,200 early Wednesday.Markets continue to witness dip-buying on every pullback in Gold so far this week, as buyers remain undeterred by the bullish sentiment on global stocks.
The latest leg up in Gold seems to be sponsored by the renewed trade tensions between the US and China after US President Trump posted on social media late Tuesday that he was considering terminating business with China having to do with cooking oil, and other elements of trade, as retribution.
Meanwhile, both sides began charging tit-for-tat port fees on Tuesday, per Reuters. This followed Trump’s retaliatory threats to slap 100% tariffs on Chinese imports as the trade war escalated after China tightened controls on its rare earth exports last week.
US-Sino trade worries combined with persistent bets for two interest rate cuts by the US Fed render negative for the USD, benefiting the non-yielding bright metal.
Despite Fed Chair Jerome Powell’s prudent remarks on Tuesday, markets continue to price in over 90% probabilities for the October and the December monetary policy meetings, the CME Group’s FedWatch Tool shows.
Further, the USD also feels the heat from a stronger CNY fix by the PBOC, which surprised markets.On Wednesday, the PBOC set the USD/CNY central rate at 7.0995 compared to the previous day’s fix of 7.1021 and 7.1281 Reuters estimate.
All eyes now remain on a bunch of Fed speakers for fresh policy cues amid a lack of high-impact US economic releases.
Additionally, the broad market sentiment and US-China trade updates will continue to play a pivotal role in the Gold price action going forward.
Daily technical analysis
The daily chart shows that the 14-day RSI is inching further into the extreme overbought zone, currently near 84, suggesting that a pullback remains in the offing.
Meanwhile, Gold buyers are once again challenging the upper boundary of the month-long rising channel, now at $4,184.
Buyers must find acceptance above the topside hurdle of the channel on a daily candlestick basis to resume the record-setting rally beyond the $4,200 round level.The $4,250 psychological level will be next on tap for Gold optimists.
On the contrary, sellers could fall back toward the $4,100 round level in case Gold faces rejection at the above-mentioned channel resistance.The next crucial support is seen at the lower boundary of the rising channel at $4,036.
A sustained move below the channel support would confirm a pattern breakdown, fuelling further correction toward the $3,950 psychological mark.
GOLD remains primed for a profit-taking pullback , not yet?
Gold keeps on making higher highs on the daily time frame, sitting close to fresh record highs below $4,200 early Wednesday.Markets continue to witness dip-buying on every pullback in Gold so far this week, as buyers remain undeterred by the bullish sentiment on global stocks.
The latest leg up in Gold seems to be sponsored by the renewed trade tensions between the US and China after US President Trump posted on social media late Tuesday that he was considering terminating business with China having to do with cooking oil, and other elements of trade, as retribution.
Meanwhile, both sides began charging tit-for-tat port fees on Tuesday, per Reuters. This followed Trump’s retaliatory threats to slap 100% tariffs on Chinese imports as the trade war escalated after China tightened controls on its rare earth exports last week.
US-Sino trade worries combined with persistent bets for two interest rate cuts by the US Fed render negative for the USD, benefiting the non-yielding bright metal.
Despite Fed Chair Jerome Powell’s prudent remarks on Tuesday, markets continue to price in over 90% probabilities for the October and the December monetary policy meetings, the CME Group’s FedWatch Tool shows.
Further, the USD also feels the heat from a stronger CNY fix by the PBOC, which surprised markets.On Wednesday, the PBOC set the USD/CNY central rate at 7.0995 compared to the previous day’s fix of 7.1021 and 7.1281 Reuters estimate.
All eyes now remain on a bunch of Fed speakers for fresh policy cues amid a lack of high-impact US economic releases.
Additionally, the broad market sentiment and US-China trade updates will continue to play a pivotal role in the Gold price action going forward.
Daily technical analysis
The daily chart shows that the 14-day RSI is inching further into the extreme overbought zone, currently near 84, suggesting that a pullback remains in the offing.
Meanwhile, Gold buyers are once again challenging the upper boundary of the month-long rising channel, now at $4,184.
Buyers must find acceptance above the topside hurdle of the channel on a daily candlestick basis to resume the record-setting rally beyond the $4,200 round level.The $4,250 psychological level will be next on tap for Gold optimists.
On the contrary, sellers could fall back toward the $4,100 round level in case Gold faces rejection at the above-mentioned channel resistance.The next crucial support is seen at the lower boundary of the rising channel at $4,036.
A sustained move below the channel support would confirm a pattern breakdown, fuelling further correction toward the $3,950 psychological mark.
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